Hello everyone,
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
Since I started exploring the topic of house construction two months ago, I have now registered on this forum.
A brief introduction about me and my wife: We are both employed (civil engineer and real estate assistant) with a net income of 4xxx.
Equity capital: 50,000 euros.
One would actually assume that with this equity and net income, buying a property should be easy. However, since I do not want to repay a loan over 30-35 years but rather a maximum of 25 years, and I don’t want to fully stretch the limit, the monthly installment and therefore the total amount quickly become restricted. A total of 250,000 net plus additional construction costs equivalent to the equity capital would be the limit here. In Berlin and its surrounding area? Practically unthinkable.
I am a civil engineer (although specializing in concrete repair and thus not an expert in single-family houses, etc.) and can therefore assess construction prices, combined with my wife’s interest in the real estate sector, allowing us to understand the high general prices for land.
With 250,000 net plus additional construction costs, there is generally not much you can do nationwide for new builds — this is my initial assessment.
There has already been a lot of discussion here in other threads about construction costs, potential capital, and what is needed. When I see bargain houses on TV, I also facepalm. My assumption is that such homes don’t bring much joy. Heating systems, plumbing, electrical installations, thermal insulation — these are often overestimated.
Currently, I am researching prefabricated houses with self-finishing options. However, I do have some concerns, even though I assume that nowadays the materials at least meet certain standards.
So, what are the options?
Being bound for 30 years and pushing the loan to the limit?
House auctions?
Hoping for a bargain plot including an affordable prefab house as a self-build (lots of work and potentially many worries)
Since I plan to start building within the next 24-36 months, my initial findings are sobering.
At least the construction company I work for could provide the foundation slab plus groundwork like drainage, etc., at a low cost. I also know structural engineers and others involved. Maybe the project can be realized with a “small” budget thanks to these circumstances.
Has anyone managed to do this before?
C
CharlieSheen18 Jun 2019 11:19Hello!
Reading all this here, I’m somewhat disappointed that I only decided in the past few weeks to go for a house instead of a rental apartment.
However, I still have the problem of estimating whether building a house or buying one is more cost-effective.
Are there any criteria or factors I could use as a guide to find the most affordable option for me?
Reading all this here, I’m somewhat disappointed that I only decided in the past few weeks to go for a house instead of a rental apartment.
However, I still have the problem of estimating whether building a house or buying one is more cost-effective.
Are there any criteria or factors I could use as a guide to find the most affordable option for me?
CharlieSheen schrieb:
Are there any criteria or factors I could use as a reference to find the most cost-effective solution for me? Look at what kind of apartment you can get for how much money.
In general, it's hard to say. If there is no equity, no land available, or if land is very expensive, then building can become very costly.
CharlieSheen schrieb:
Are there any criteria or factors I could use as a guide to find the most cost-effective solution for me? Check what the local market offers and whether there are any available plots of land.
Tassimat schrieb:
Anyway, people will never fully agree, it’s all way too individual.
Later on, you write “We all agree that...” and personally, I have to disagree with almost every point. Disagreement is totally fine. I’ll try to respond to what you wrote.
Tassimat schrieb:
The risk is not determined by the purchase price, but for me, risk is only about resale potential in case of a disaster. €500,000 in the middle of nowhere might be unsellable, whereas in Munich it could be a risk-free bargain. Other risks depend on the job, but not on the property value. By “there is always a risk,” I didn’t mean just the value of the house… More the overall situation: illness, job loss, divorce, stress, etc.
Also, your example comparing the middle of nowhere and Munich is a bit outdated.
If I could buy a house in Munich today for €500,000, there would be a reason. Is there a landfill on the neighbor’s lot? A planned airport nearby? And so on… In these cases, resale won’t be quick or guaranteed despite the bargain price. So risk always exists.
Or you might be very lucky like I was and buy below market value. But I’ll leave those rare cases aside for this discussion.
Tassimat schrieb:
An unfair comparison. How about a 2-room rental apartment versus a 2-room condominium? There are also people who don’t want or need a garden. I have a self-made millionaire in the family who also rents. Please don’t overlook what I wrote…
I said: We all agree that generally or at least most forum members find living in a house more enjoyable than living in a 2-room apartment under the roof—if they can afford it?
My statement is about the majority of users here. I seriously doubt more members would want to live in apartments rather than houses.
Furthermore, I don’t believe a self-made millionaire would voluntarily choose an attic apartment, sweating in summer like a pig and freezing like crazy in winter.
Tassimat schrieb:
No, because we will never agree on exact numbers for household management. Example: Our car costs €250 all-in, and we shop cheaper. Suddenly there’s an extra €500 available for a property. You could argue endlessly without agreement. Sure, it’s tedious to argue over individual items… But when I hear “€250 all-in” for a car, I get suspicious and suspect some accounting gimmicks. Not 100% sure though.
What about reserves for repairs, wear and tear, winter/summer tires, air filter changes, inspections, possible deductibles after accidents, and so on? €250 all-in is really optimistic.
Also, three people eat as three people do. Sure, you can shop cheaper, but maybe your budget is actually even lower than what I mentioned. Then the calculation changes again.
I’m giving rough numbers, not exact ones. That’s impossible anyway since expenses vary greatly. BUT the general scale is interesting.
Someone earning €4,000 in Munich with wife and child faces different costs than someone earning €4,000 in Chemnitz with wife and child. That’s clear. But you can look at rough estimates like: Everything is paid, and you have €500 leftover in Stuttgart. Others have €300 leftover in Leipzig, or €1,500 leftover in Hamburg, and so on…
Tassimat schrieb:
First, people would have to agree on the calculation basis for “end of the month.” Are vacation and savings already factored in? If yes, then even building with a €1 surplus would be possible. Major maintenance doesn’t happen at the beginning, and your €500 all-in for a car already covers a new one fully. So what could possibly happen? I have NEVER needed a sudden four-digit sum in my life. By ongoing costs, I meant all monthly expenses including property tax, TV license fee, insurance, car loan and insurance, etc.
But we can agree on something for the sake of discussion. No problem.
For example, everything included except reserves for the house, extra retirement savings, and vacations.
Regarding your question about what could happen requiring a sudden four-digit amount... Well, you haven’t lived in a house longer before. Things can add up fast.
Here are several examples of why you might suddenly need a four-digit sum:
(please no debate on why or why not; these are just examples)
– Daughter wants to go on a school exchange to the USA
– You want to buy a MacBook Pro
– You decide to get a fireplace
– You want to buy a trailer to bring garden waste to the recycling center
– Tax back payment
– Washing machine and dryer break down at the same time
– You want to spontaneously do a diving certification with the family on vacation
I can think of plenty of reasons why you’d suddenly need thousands of euros.
And reserves should be built up. Even if at first, the new house doesn’t require spending from those reserves. You build the reserves for when it actually happens—5, 10 years ahead, etc.
Tassimat schrieb:
Are vacation and reserves included? If yes, then you could easily build with a €1 surplus. Sure, if you basically don’t live life—no friends, no spontaneity, no fun—you can survive in a house forever with a €1 surplus. But that’s not my way of living.
Again, everyone’s different.
Tassimat, this post isn’t meant as a jab against you or your opinion! I just chose a slightly cheeky tone at times. No hard feelings here.
Cheers
@Farilo but your examples seem a bit far-fetched. If there isn’t enough money, then you just don’t buy a MacBook Pro but a more affordable PC, or you don’t get a diving certification, and so on. These are really luxury issues, and I don’t think they depend on whether you rent or buy, but rather on how well you earn.
Farilo schrieb:
Tassimat, This post is not meant as a jab at you or your opinion! I just expressed myself a bit more boldly at times. No hard feelings here.All good, you can express yourself as boldly as you want.
I’ll respond briefly due to lack of time, and only to half of it.
Farilo schrieb:
Because I wrote: We all basically agree, or at least most here in the forum, that living in a house, if you can afford it, is more enjoyable than living in a two-room apartment under the roof, right?The point was that you need to compare two equivalent types of housing. You can also rent a house, and then you have to compare that with buying a house of the same size. What you cannot do is compare a two-room apartment with a house. Such a comparison makes absolutely no sense.
Regarding your example expenses: Yes, they are all expensive, but apart from repairs, you mention costly impulse purchases (trader cards) and luxury spending (Apple hardware), for which you don’t need to save reserves. I know people who have a separate tech budget for things like that. My point was about what is actually urgently necessary and requires substantial savings, such as defective household appliances or, especially at some point, the heating system.
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